Press Release
VIS Assigns Preliminary Rating to Proposed Short Term Sukuk-3 (STS-3) of Citi Pharma Limited
Karachi, December 29, 2025: VIS Credit Rating Company Limited (VIS) has assigned a preliminary rating of ‘A1(plim)’ (A one preliminary) to the Short Term Sukuk-3 issue of PKR 2,000 million of Citi Pharma Limited (‘CPHL’ or the ‘Company’). The short-term rating of ‘A1(plim)’ indicates strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. The entity rating of CPHL is ‘A/A1’ (‘Single A/A One’) with a ‘Stable’ outlook.
CPHL was established on October 8, 2012, and began its journey in the pharmaceutical sector following the acquisition of Askari Pharmaceuticals (Private) Limited (APPL) from the Army Welfare Trust in 2013. This strategic acquisition enabled CPHL to inherit APPL's operations, focusing on the production and distribution of Active Pharmaceutical Ingredients (APIs) and formulation drugs. Transitioning into a public unlisted company in October 2020, CPHL achieved a significant milestone by listing on the Pakistan Stock Exchange (PSX) on July 9, 2021. Today, it stands as a key player in Pakistan’s pharmaceutical industry, renowned for producing high-quality APIs like Paracetamol. The Company operates across two core segments—APIs and pharmaceutical formulations—supporting the production of Finished Pharmaceutical Products (FPPs) by combining APIs with other essential compounds.
The proposed short-term instrument will be structured on the basis of Musharakah (Shirkat-ul-Aqd). The Sukuk, amounting to PKR 2,000 million (inclusive of green shoe option of PKR 500 million), will be rated, privately placed, and unsecured. It is being issued to meet the Company’s working capital requirements and to retire the previously issued Sukuk. The instrument will have a tenor of six (06) months, carrying a profit rate of 3-month KIBOR plus 65 bps per annum. Profit and principal will be repaid in a single bullet payment at maturity.
The rating draws support from CPHL’s strong positioning in the API segment of the pharmaceutical sector, which carries relatively low business risk due to stable demand and limited sensitivity to economic cycles. Sustained demand for locally manufactured APIs underscores the strategic importance of domestic production, further reinforced by supportive government policies aimed at import substitution. High entry barriers—arising from stringent regulatory requirements, compliance standards, and significant capital intensity—limit competitive pressures and contribute to industry stability. The rating also reflects steady revenue growth and improving margin profile, driven by the Company’s gradual diversification into higher-margin formulation products through proprietary brands and institutional sales, alongside expansion in nutraceutical exports. Strategic collaborations with international partners, including Murli Krishna Pharma (India) and Hangzhou Newsea Technology Co. Ltd (China), are expected to enhance operational efficiency through technology transfer and automation, while also supporting medium-term international expansion.
While client and product concentration remain key considerations, management initiatives aimed at broadening the customer base and diversifying the product portfolio are expected to mitigate these risks over time. CPHL maintains a sound liquidity and profitability profile, supported by prudent financial management and adequate short-term credit lines. The assigned rating further incorporates the intended use of STS-3 proceeds toward working capital support and retirement of the previously issued short-term sukuk, with continued maintenance of a comfortable liquidity profile remaining a key rating consideration.
For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria: Corporates:
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
Instrument Rating:
https://docs.vis.com.pk/Methodologies-2025/IRM-Apr-25.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf